Correlation Between Woori Technology and Namhae Chemical
Can any of the company-specific risk be diversified away by investing in both Woori Technology and Namhae Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Woori Technology and Namhae Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology Investment and Namhae Chemical, you can compare the effects of market volatilities on Woori Technology and Namhae Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Woori Technology with a short position of Namhae Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Namhae Chemical.
Diversification Opportunities for Woori Technology and Namhae Chemical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woori and Namhae is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Namhae Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhae Chemical and Woori Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Woori Technology Investment are associated (or correlated) with Namhae Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhae Chemical has no effect on the direction of Woori Technology i.e., Woori Technology and Namhae Chemical go up and down completely randomly.
Pair Corralation between Woori Technology and Namhae Chemical
Assuming the 90 days trading horizon Woori Technology Investment is expected to under-perform the Namhae Chemical. In addition to that, Woori Technology is 2.88 times more volatile than Namhae Chemical. It trades about -0.28 of its total potential returns per unit of risk. Namhae Chemical is currently generating about 0.07 per unit of volatility. If you would invest 630,000 in Namhae Chemical on November 7, 2024 and sell it today you would earn a total of 6,000 from holding Namhae Chemical or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Woori Technology Investment vs. Namhae Chemical
Performance |
| Timeline |
| Woori Technology Inv |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Namhae Chemical |
Woori Technology and Namhae Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Namhae Chemical
The main advantage of trading using opposite Woori Technology and Namhae Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology position performs unexpectedly, Namhae Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Namhae Chemical will offset losses from the drop in Namhae Chemical's long position.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. AfreecaTV Co | Woori Technology vs. CJ ENM |
| Namhae Chemical vs. Neungyule Education | Namhae Chemical vs. Asia Technology Co | Namhae Chemical vs. NewFlex Technology Co | Namhae Chemical vs. Eagle Veterinary Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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